Tag Archives: Bobby Kotick

Getting Optimized and Other Blizzard Tidbits

This is one of those “putting context in the timeline” sort of posts, so I remember what was going on.

We are still subscribed to World of Warcraft at our house.  My daughter and I do some of the special events.  But, for me, WoW is clearly the third game in a situation where I really only have time for two most weeks.  It is not on the “Games I Play” list in the sidebar.

Anyway, some stuff happened on the WoW front.

Subscribers

WoW only lost 100,000 subscribers in Q4 2011, according to their earnings call.  Given that they had previously shed ~2 million subscribers since the end of 2010, the bleeding has certainly slowed down.  It is still odd to say “only 100,000 subscribers lost,” as that number would put any of WoW’s erstwhile competitors into near terminal shock if not straight into the morgue.

My first thought was that Star War: The Old Republic sure didn’t have much impact.  But I think SWTOR came along too late in the quarter to really count as a factor there.  I am sure Blizz counts everybody who is subscribed at the moment, so unless you subscription ran out just as you cancelled to go play SWTOR, you were probably still on the books.

We’ll see what the next quarterly statement says.

On the Full Year Plan

Over one million accounts opted for the full year and get Diablo III, Panda beta access, and a special mount.

I must admit here that my daughter and I are on that list.  She wants the Panda beta bad… she likes to run around with pre-made level cap characters… and I was going to buy Diablo III on day one at list price anyway, so there we go.

Green Armadillo had a good post about this, which I won’t repeat in full.  I will just say that the fact that Blizz got 20-25% of their Europe/Americas audience to sign on for a year seems like a pretty big coup.  And they can already count this as over a million copies of Diablo III sold before the product is done.

I Have Been Optimized

I wasn’t sure what this was really about when I brought up the WoW launcher last week.

A flashing red light means I've won something, right?

But Blizzard assures me it will all be fine.  They are undoubtedly just making room for pandas on my hard drive.

Still, I am going to be that somebody running late for a raid was probably spitting bullets when this came up.

Some Dates… or Dates for Dates… Were Offered

We got a nice slide from Blizzard about upcoming items.

Saved for the record

Diablo III is now targeted at Q2 2012.   We can officially say that it slipped when it doesn’t ship until Q3 2012 at the earliest.  I mean, given Blizzard history, we all know that is where we’ll be, right?

We also got a date, a very concrete date, March 19, 2012, to get more information about the next WoW expansions, Adventures in Panda Bay.  I will still be very surprised if Pandas ship before Q4 2012.

A New Mount That Made No Splash At All

Blizzard added a new flying mount for WoW to the Blizzard store, bringing the total of store bought mounts to three.  Three!

Three $25 Mounts

The new mount, Heart of the Aspects… and I think part of the problem with this mount is having a name that sounds like a description… a description of something that conjures forth no mental image whatsoever for me… slipped into the store without much fanfare.  Or at least I did not notice any.

I would have put "dragon" in the name

I also have to say that, when it comes to mounts for sale for cash, Blizzard is falling behind the curve.  I think, looking at the Station Cash Store in EverQuest II, SOE must put out 2 new cash mounts a month.  Granted, a lot of them look like ass, but they are clearly shoveling them out at a much faster rate.  Of course, SOE makes almost 25% of their revenue on mounts while Blizzard still does it the old fashioned way… subscriptions.

I suppose one of the interesting things is that this mount went back to the “buy once, have it forever on all your characters” model.  I am not sure what that says about the Guardian Cub model, but it cannot be a ringing endorsement.

And how much gold is a Guardian Cub going for these days?  Has that market totally collapsed yet?

What Else?

Blizzard is still likely to make all the profits for Activision Blizzard during quarters when no Modern Warfare title ships.

Oh, and Bobby Kotick did not ruin the movie Moneyball.  He seemed right at home as the owner of a business totally detached from the essence and passion that drives it for nearly all of its participants and fans.  A big stretch for him, I know, but he pulled it off.

Did I miss anything?

Blizzard – Down Nearly 2 Million Subscribers, But Still Insanely Profitable

The big news for MMO watchers in Activision Blizzard’s quarterly report was the mention that World of Warcraft was down to 10.3 million subscribers, a loss of nearly 2 million from its 2010 peak.

Wait, where did I get that 2 million number?

Last year’s end of year report from Activision Blizzard stated that, as of Dec. 31, 2010, there were more than 12 million World of Warcraft subscribers.

As of October 7th, 2010 Blizzard claimed 12 million subscribers world wide.

Cataclysm came out between those two, which must have bumped up the subscriber base some, though we cannot tell exactly how big of a bump that was.  Still, selling 4.7 million units in in the first month probably a reasonable indication that some players came back for the expansion, especially since China did not get Cataclysm until this past summer.

So I think we can safely assume that, at some point in December there was a subscription peak at least close to 12.3 million.  And with the statement that WoW is down to 10.3 million, 2 million missing subscribers seems to be a reasonable estimate to throw around.

So that is my number.

What does it mean?

While I feel some of it is repudiation of the direction Cataclysm went, with its very solo-centric feel, my gut say that having just five levels of content, and pretty easy content, just wasn’t enough to keep the non-raiders hanging around.

The raid-or-die crew will blast through the content to get to work on raiding, but will hang out doing that for a long time.  People like me are more invested in a slower climb through the new zones, and those five zones were pretty fast.  That and I think the value people put on the new 1-60 content was pretty low.

Anyway, mistakes were made and at some point next year Pandas will either fix them or make them worse, we shall see.

But does being down 2 million subscribers, a 17% dip from peak (my estimate), mean doom for Blizzard?

Probably not.

The Activision Blizzard third quarter results bear that out pretty strongly.

Way down near the bottom, the results are broken out by “segment,” which means three different sections of the company:

  • Activision Publishing (“Activision”) — publishes interactive software products and content.
  • Blizzard — Blizzard Entertainment, Inc. and its subsidiaries (“Blizzard”) publishes games and online subscription-based games in the MMORPG category.
  • Activision Blizzard Distribution (“Distribution”) — distributes interactive entertainment software and hardware products.

Revenue for Activision was $253 million for the last quarter and $898 million for the year so far.

Revenue for Blizzard was $297 million for the last quarter and $968 million for the year so far.

So the Activision and Blizzard sides of the houses are not far out of syn when it comes to how much money they bring in before expenses.  And the numbers for Distribution, just to round this out, were $77 million for the last quarter and $214 million so far in 2011.

Then there is income, which is the amount of money left after they paid all the bills but before they paid taxes.

Income for Activision was… well… they fell short $36 million dollars last quarter, and for the year it has made a grand total of $42 million.

Income for Blizzard was $120 million last quarter and it has made $425 million dollars in 2011 so far.

And Distribution is in for a million dollars of income this year.

So with revenues that are reasonably close, Blizzard has made TEN TIMES as much income this year as Activision.

Not only that, Blizzard makes more than 43 cents on every dollar it takes in.  So of your $14.99 subscription fee, $6.58 cents go into a bucket that might as well be labelled “Profits and/or Bail Out Money for Bobby.”

Okay, yes, it is a bit more complicated than that.  There are other costs and taxes that come in after that number.  And the numbers are down from last year, which is partially because Blizzard didn’t ship anything new in 2010 and partially because of the subscription slide I am sure.  But those are still really solid financials.

So when Bobby the Tick comes out and says “Profits tripled!” it does not mean, as has been reported in the media, that Call of Duty saved the day.

Call of Duty merely meant that Activision wasn’t nearly as big of a drain of Blizzard’s money making acumen as they might have otherwise been.

Blizzard has been saving the day since was joined up with Activision.